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Victoria and NSW make changes to electoral funding legislation

30 July 2018

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Following the recent proposed changes to the law on federal election funding, Victoria and NSW have followed suit with the Victorian Electoral Legislation Amendment Bill 2018 soon to become law, and NSW amending legislation that deals with political donations and election expenditure in state and local government elections.

This page does not cover political campaigning and advocacy in federal elections. For information about financial disclosure obligations for third parties under the Commonwealth Electoral Act 1918 (Cth), you should read our fact sheet on our Election funding and financial disclosure obligations page.

Under the legislative changes to Victoria's political donations regime:

Donations from a donor are capped at $4,000 over a four-year parliamentary term (both single donations and aggregated donations from the one donor must not exceed the $4,000 cap), completely eliminating large donations to political parties, associated entities and third-party campaigners

Disclosure limit is reduced from $13,500 to $1,000 per financial year

Donations from foreign corporations and foreign nationals are banned

Tougher penalties are introduced for failing to comply, including up to 10 years' imprisoment for breaches

Party bunting (signage) at polling stations are banned, and

Real-time donations will be introduced that reveals who donates and when.

A not-for-profit organisation could potentially be caught under the definition of 'third-party campaigner', which is an entity (other than a political party, election candidate, group, elected member, associated entity, or a nominated entity of a registered political party) that receives political donations or incurs political expenditure exceeding $4,000 in a financial year.

In the context of third-party campaigners, political expenditure means any expenditure for the dominant purpose of directing how a perosn should vote at an election, by promoting or opposing the election of any candidate at the election, or a registered political party or an elected member. It does not include expenditure incurred by a third-party campaigner that is published, aired or disseminated outside of the election campaigning period, unless the material refers to a candidate or registered political party, and how a person should vote at an election. For example, a third-party campaigner might include an advocacy or lobby group, whose area of interest includes state public policy issues. In advocating for a particular issue, they may support a particular political party or candidate that shares their views.

There are a number of other restrictions which may impact on third-party campaigners. Under the Act, political donations to third-party campaigners will be banned from certain sources, such as foreign donors (people who are not Australian citizens or residents) and there will be a $4,000 cap on donations to third-party campaigners. Furthermore, it will be unlawful for a donor to make 'political donations' to more than six third-party campaigners during an election period.

If my not-for-profit organisation is caught by the new Victorian laws what does it mean?

Under the new laws, the Victorian Electoral Commission (VEC) will have the power to appoint any employee as a compliance officer who can issue notices to third-party campaigners to produce documents or anything else specified in the notice, or appear before the compliance officer. It means an organisation should be aware that it may have to disclose its expenditure and political donations.

Third-party campaigners will also need to nominate a registered agent whose name and address will be registered on the VEC's Register of Agents.

The registered agent of a third party campaigner must ensure a separate state campaign bank account is kept, and any political donations (including small contributions) must be paid into this separate account. The registered agent will also need to provide an annual return to the VEC within 16 weeks after the end of each financial year, which sets out the total amount received by or on behalf of the third-party campaigner, and if the sum of all amounts received from a donor during the financial year is more than the disclosure threshold of $1,000, the donor's full name and address, amount received, whether the amount is a political donation or for another purpose, and the total amount paid by or on behalf of the third-party campaigner during the financial year.

Donors to third-party campaigners will also be subject to new disclosure requirements. A donor must provide the VEC with a disclosure return for each political donation they make during a financial year that exceeds $1,000 (the disclosure threshold) within 21 days of making the political donation. The donor will also have to provide a disclosure return to the VEC if it makes more than one donation (each less than $1,000) to the same third-party campaigner and the total of those donations in a financial year is equal to or exceeds $1,000. The third-party campaigner must notify the donor of these disclosure obligations.

NSW passes the new Electoral Funding Act 2018

On 20 May 2018, the NSW Parliament passed the Electoral Funding Act 2018 (the NSWAct). The NSW Act replaces the Election Funding, Expenditure and Disclosures Act 1981 (the Old Act).

Broadly speaking the NSW Act governs how political donations are made, received and used in state and local government election campaigns including the use by entities (e.g. not-for-profit organisations) to promote or oppose a party or the election of a candidate or influence the voting at a state or local government election.

Will the NSW Act impact my not-for-profit organisation?

The most likely way a not-for-profit organisation would fall under the scope of the NSW Act would be meeting the definition of a ‘third-party campaigner’. If you are actively engaged in influencing local or state elections directly (or indirectly), or promoting or opposing candidates directly (or indirectly) it may be worth seeking legal advice on whether you meet the definition of third party campaigner.

However, given the similarities between the NSW Act and Old Act it is highly likely that if you are caught by the NSW Act you would have already been caught by the Old Act.

There are two key changes to the NSW Act that might impact third party campaigners:

the amount of ‘electoral expenditure’ a third-party campaigner can spend in the lead up to the election (from $1.3 million to $500,000 for state elections), and

it is now unlawful for a third-party campaigner to act in concert with another person or persons to incur electoral expenditure above the capped amount in a state or local election campaign (during a specific period in the lead up to the election).

If my not-for-profit organisation is caught by the NSW Act what does it mean?

POLITICAL DONATION LAWS ACROSS AUSTRALIA: Third-party campaigners are now included in Commonwealth, Victoria, NSW, Queensland, Western Australia, South Australia and the Northern Territory electoral funding laws.